Investors return to IPOs with Rs 2.2 trillion bids across three offerings
Mobikwik subscribed 119x, Vishal Mega Mart 27x, Sai Life 10.3x
 "Investors return to IPOs with Rs 2.2 trillion bids across three offerings")
It is not just the secondary market that is witnessing a revival in fortunes. Even the initial public offering (IPO) market have roared back to life, with investors submitting bids worth over Rs 2.2 trillion on the three IPOs that wrapped up on Friday.
Fashion retailer Vishal Mega Mart (VMM)’s IPO (fifth largest of the year) garnered 27.3x subscription, with bids exceeding Rs 1.6 trillion. Meanwhile, digital payments major One MobiKwik Systems’ IPO was subscribed nearly 120 times, cornering bids worth Rs 39,542 crore. Pharma firm Sai Life Sciences’ public offer was subscribed a little over 10 times, with bids totalling Rs 22,000 crore.
The three IPOs, which together mopped up over Rs 11,600 crore, broke the trend of poor subscriptions, and are also expected to break the spell of weak listings.
The 10 per cent drop in the Nifty 50 index from its record highs in September didn’t make too much of a dent on IPO issuance. However, majority IPOs that hit the market in October-November period saw lukewarm response and poor post-listing performance. For instance, the IPOs of Hyundai Motor India, Swiggy, Afcons Infrastructure, Acme Solar, NTPC Green Energy, and Niva Bupa Health were all subscribed less than 4 times.
Experts said the response to the latest offerings could embolden companies waiting on the sidelines to hit the market. The improvement in sentiment follows a sharp rebound in the market from its November lows. The benchmark Nifty 50 index has rallied 6 per cent from its last month’s lows, while the Nifty Midcap 100 and the Nifty Smallcap 100 have gained 8.5 per cent and 10.3 per cent, respectively. The gains have been supported by revival in flows from foreign portfolio investors (FPIs).
Vishal Mega Mart’s Rs 8,000 crore IPO was entirely an offer for sale by promoter Samayat Services, which currently holds 96.55 per cent stake. VMM sells a wide range of products across apparel, general merchandise, fashion, home furnishings, and kitchen appliances. The company targets middle and lower-middle-income groups through a network of over 640 stores. At the upper end of its price band of Rs 78, the company is valued at Rs 35,168 crore, 76x its FY24 net profit of Rs 462 crore.
MobiKwik will be valued at Rs 2,167 crore at the top-end of the price band of Rs 279. Its IPO of Rs 572-crore was entirely a fresh issue.
Sai Life’s Rs 3,043 crore issue consisted of Rs 950 crore fresh issuance and rest secondary. The company, a contract research, development, and manufacturing organisation (CDMO), is valued at Rs 11,418 crore —126 times its FY24 net profit.